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Sunday, September 27, 2020

What’s Next for CytoDyn Inc (OTCMKTS:CYDY)?

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It may pay to take note of the fact that CytoDyn Inc (OTCMKTS:CYDY) just announced that it has completed a new non-dilutive convertible debt offering with an institutional investor, which provides $25 million of immediately available capital.

According to the release, the note, has a two-year maturity, bears interest at the rate of 10% per annum and is secured by all assets of the Company, excluding its intellectual property.  The note may be converted at the option of the investor into shares of the Company’s common stock at a conversion price of $10.00 per share.

CytoDyn Inc (OTCMKTS:CYDY) promulgates itself as a late-stage biotechnology company that focuses on the clinical development and commercialization of humanized monoclonal antibodies to treat human immunodeficiency virus (HIV) infection.

Its lead product is PRO 140, a therapeutic anti-viral agent, which is in Phase IIb extension study for HIV as monotherapy, rollover study for HIV as a combination therapy, Phase IIb/III investigative trial for HIV, Phase Ib/II trial for triple-negative breast cancer, and Phase II trial for graft-versus-host disease.

CytoDyn Inc. has strategic agreement with Samsung BioLogics Co. Ltd. for the clinical and commercial manufacturing of leronlimab. The company was formerly known as RexRay Corporation. CytoDyn Inc. was incorporated in 2002 and is based in Vancouver, Washington.

According to company materials, “CytoDyn is a biotechnology company developing innovative treatments for multiple therapeutic indications based on leronlimab, a novel humanized monoclonal antibody targeting the CCR5 receptor. CCR5 appears to play a key role in the ability of HIV to enter and infect healthy T-cells.  The CCR5 receptor also appears to be implicated in tumor metastasis and in immune-mediated illnesses, such as GvHD and NASH. CytoDyn has successfully completed a Phase 3 pivotal trial with leronlimab in combination with standard anti-retroviral therapies in HIV-infected treatment-experienced patients. CytoDyn plans to seek FDA approval for leronlimab in combination therapy and plans to complete the filing of a Biologics License Application (BLA) in 2019 for that indication. CytoDyn is also conducting a Phase 3 investigative trial with leronlimab (PRO 140) as a once-weekly monotherapy for HIV-infected patients and, plans to initiate a registration-directed study of leronlimab monotherapy indication, which if successful, could support a label extension. Clinical results to date from multiple trials have shown that leronlimab (PRO 140) can significantly reduce viral burden in people infected with HIV with no reported drug-related serious adverse events (SAEs). Moreover, results from a Phase 2b clinical trial demonstrated that leronlimab monotherapy can prevent viral escape in HIV-infected patients, with some patients on leronlimab monotherapy remaining virally suppressed for more than five years. CytoDyn is also conducting a Phase 2 trial to evaluate leronlimab for the prevention of GvHD and a Phase 1b/2 clinical trial with leronlimab in metastatic triple-negative breast cancer.”

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As noted above, CYDY just announced that it has completed a new non-dilutive convertible debt offering with an institutional investor, which provides $25 million of immediately available capital.

The stock has suffered a bit of late, with shares of CYDY taking a hit in recent action, down about -8% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -18%. Furthermore, the name has witnessed a pop in interest, as transaction volume levels have recently pushed 56% over what the stock has registered over the longer term.

Nader Pourhassan, Ph.D., President and Chief Executive Officer of CytoDyn, stated, “We are very pleased with the continued support and tremendous confidence demonstrated by this institution’s fourth financing round with us. They clearly understand the opportunity before us and we now have the liquidity to accelerate our business plan without tapping into the increased share authorization recently approved by our stockholders. This injection of capital will help us deliver leronlimab to patients as soon as the regulatory pathway is clear for potentially COVID-19 (for three different populations), Cancer (23 different indications), and HIV (combination, monotherapy, HIV cure and PrEP). I am very excited to share with all of our stakeholders the excitement we have around our COVID-19 therapies during tomorrow’s conference call, as well as our expected timelines.” 

Currently trading at a market capitalization of $2.8B, CYDY has a significant war chest ($7.1M) of cash on the books, which is balanced by about $41M in total current liabilities. One should also note that debt has been growing over recent quarters. The company is pre-revenue at this point. This may be a very interesting story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $CYDY stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $CYDY, either long or short, and we have not been compensated for this article.

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